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Excerpts from Princeton’s March 13 filings

Posted March 13, 2006; 05:19 p.m.

by Cass Cliatt

In Opposition to Plaintiff's "Admitted Overcharges and Offsets" Motion

In 1965, the Robertson Foundation Board reviewed and approved the Bowen Formula with the understanding that calculating the actual cost of the School's expanded graduate program on a dollar-for-dollar basis, year in and year out, would be impossible. Instead, the Bowen Formula operates through a series of charges and offsetting credits that, taken together, are designed to achieve a "fair approximation" of the cost of the expanded graduate program. In their motion for summary judgment, plaintiffs take a piecemeal approach to the Bowen Formula that flagrantly ignores its many offsetting credits and otherwise distorts the record surrounding the defendants' allegedly "admitted overcharges." Defendants have not "admitted" that Princeton "overcharged" the Foundation by $18,647,923, or by any other amount.

All of the alleged "overcharges"—including both the allegedly "admitted overcharges" that are the subject of plaintiffs' motion for summary judgment as well as every other "overcharge" that plaintiffs have alleged in this case—must also be evaluated in light of several other historical undercharges and over-credits that have greatly enriched the Foundation.

The Bowen Formula

Generally speaking, the [Bowen] Formula seeks to allocate cost related to the School's undergraduate program and base-year graduate program (that is, the level of graduate program activity that existed at the time of the Robertson gift, adjusted for inflation) to the University, while allocating expenses relating to the expanded graduate program to the Foundation. The University initially bears the cost of funding the School's expenses throughout the year; a portion of these expenses is then allocated to the Foundation at the end of the fiscal year in an annual "settlement" process. The Bowen Formula was presented to and approved by the Foundation Board in 1965, and has governed the allocation of School expenses for the past four decades without objection.

In many cases, and for a variety of practical reasons, the Bowen Formula settlement is temporarily "charged" for expenses outside the Foundation's mission (for example, undergraduate expenses) with the expectation that these costs will be offset by a countervailing credit…. Similarly, the Formula allocates the cost of graduate student fellowships by charging all such costs initially to the settlement and then providing an offsetting credit for a specified number of base-year fellowships for which the University retains financial responsibility. These offsetting credits are as important to the proper allocation of costs under the Bowen Formula as the charges included in the Robertson Foundation settlement. Plaintiffs' motion for summary judgment turns a blind eye to these credits and is thus based on a grossly distorted picture of the settlement process and the equities that the Bowen Formula was designed to achieve.

[T]he record shows that plaintiffs William Robertson and Robert Halligan, during their decades of service on the Board, exercised no diligence in reviewing the application of the Bowen Formula. Mr. Robertson testified that he never asked for any backup documents relating to the Bowen Formula settlement prior to just before filing this lawsuit; nor did he remember asking any questions about how the settlement was calculated. Mr. Halligan testified that he did not know the principles by which the University applied the Bowen Formula in the settlement process, and that he did not ask any questions about the Bowen Formula or the settlement process.

The Alleged "Overcharges"

[T]here are factual disputes about the existence and amount of most of the alleged "overcharges" … [and] there are factual disputes as to whether certain allegedly "improper" charges were, in fact, counterbalanced by simultaneous Bowen Formula credits such that the charges were actually covered at the expense of the University—not the Foundation. For example, plaintiffs seek summary judgment as to over $700,000 in costs relating to fellowships for non-Woodrow Wilson School graduate students. However, at the time these charges were booked, the University was crediting the Foundation with fellowship income—in excess of its obligations under the Bowen Formula—for the specific purpose of covering the costs of these fellowships. In fact, the amount of the excess credit actually exceeded the cost of these fellowships, leaving the Robertson Foundation with a net gain.

[T]here are factual disputes regarding a number of global "undercharges" or "over-credits" that must be taken into account when evaluating Plaintiffs' claims regarding these alleged "admitted overcharges," as well as any other alleged overcharges. For example, defendants have shown that the University's indirect cost charges to the Foundation during the 1990s understated true costs by over $10 million; that the University's payment of Foundation-funded expenses in advance of the annual settlement resulted in an uncompensated financial benefit to the Foundation of more than $13 million; and that the University's continued funding of the School's base-year graduate program (which is not required by the Foundation's Certificate of Incorporation) has reduced charges to the Foundation by over $200 million. These benefits to the Foundation should be considered in any equitable resolution of this case.

[The] practice of posting undergraduate expenses and simultaneously offsetting them on the settlement ledger has never been a secret, and the Family-designated Trustees have never objected to it before filing this lawsuit. Yet Plaintiffs, in alleging that the Foundation was improperly charged $757,426 for such undergraduate expenses, utterly fail to take into account any of the corresponding (and simultaneous) settlement credits that were specifically intended to offset these charges. It is as if Plaintiffs have counted only the debits on a balance sheet, while entirely ignoring any of the credits.

At some point in the past 20 years [after 1985 and ending in 2002] … it appears that the Foundation began being charged for the purchase of certain equipment used by the Woodrow Wilson School. At the same time, equipment depreciation continued to be charged as a component of the Foundation's indirect cost rate.…. In fact, Plaintiffs have only identified $1.474 million in equipment costs that were directly charged to the Foundation during the entire period—as compared to the more than $16 million they seek to recover for equipment depreciation charges…. [P]laintiffs admit that the Foundation was not charged for direct equipment costs before 1985. Despite this evidence—and their own admission to the contrary—plaintiffs' expert … nevertheless asserts that the University should pay back (with compounded interest) every dollar of indirect equipment depreciation that it charged the Foundation for the past four decades – even though the Foundation was not being improperly "double charged" for direct equipment costs during most of those years. And … [he] dramatically inflates his claims by annually compounding the charges over 40 years, often using the Foundation's rate of investment return. By this method, [he] can take an equipment depreciation charge of $10,763 in 1965 (a year in which there is no evidence of a mistaken double charge), and extrapolate it into a current-day "overcharge" of $788,175 -- a more than seventy-three-fold increase. In fact, over $12.7 million of Plaintiffs' claims regarding these allegedly "admitted overcharges" (more than three-quarters of their total claim) are based on equipment depreciation charges during the first twenty years of the Bowen Formula, a period for which there is no evidence of a double charge.

The Graduate Funding Agreement

Plaintiffs claim that they are entitled to summary judgment as to $782,376 that the University allegedly "diverted" from the Foundation over a three-year period for purposes of supporting graduate fellowships for non-Woodrow Wilson School students in the departments of economics, politics and sociology. This claim has no merit: Plaintiffs are simply wrong about who paid for these fellowships. As explained below, under the so-called graduate funding agreement ("GFA"), the University—not the Robertson Foundation—provided all of the funds for these graduate fellowships (which, in any case, reasonably and properly could have been charged to the Foundation).

The GFA was a three-year "trial" program entered into by Woodrow Wilson School Dean Michael Rothschild. Dean Rothschild believed that the School would benefit from providing financial support for a limited number of Ph.D. students in the departments of economics, politics and sociology. These social science departments have close historic ties to the Woodrow Wilson School…. The Woodrow Wilson School began funding the GFA program in FY 2000 with the understanding that the program's fellowships would be entirely supported with …excess income from … non-Robertson Foundation endowments …. The costs of the GFA fellowships were … combined with the cost of Robertson Foundation-supported Woodrow Wilson School student fellowships in the FY 2001 financial tables that were presented to the Foundation Board in the spring of 2002. These tables also included the full amount of income credited from the "hard" [non-Robertson] fellowship endowments (including the amount in excess of the University's obligation) in the net fellowship cost line.

This arrangement proved to be more than fair to the Foundation…. [B]etween FY 1990 and FY 2004, the Robertson Foundation was credited with $902,190 in excess income from the "hard" fellowship endowments … [y]et the Foundation was charged only $782,376 in costs for the non-Woodrow Wilson School Ph.D. fellowships funded under the GFA program. Therefore … the University … over-credited the Foundation by more than $100,000. Contrary to Plaintiffs' contentions, this hard endowment income is not some unrelated "overcredit" which Defendants seek to apply, after the fact, to "offset" the GFA costs. Rather, the University Treasurer's Department anticipated from the very inception of the GFA program that it would be funded from these non-Foundation sources. Thus, the Robertson Foundation did not bear any of the cost for the GFA fellowships—even though these fellowships were intended to benefit (and did benefit) the faculty of the Woodrow Wilson School.

It is now clear that the funding of the GFA fellowships did not require a correction, but it needed a better explanation—to President Tilghman, to Dean Slaughter, and to the Foundation Board. T he mechanics of funding the GFA fellowships are highly complex, prone to misunderstanding, and, in fact, were misunderstood by some individuals at Princeton who were not involved in them on a day-to-day basis . Such confusion is evident, for example, in the e-mail that Thomas Wright sent to Shirley Tilghman on April 4, 2002, just twelve days before President Tilghman's first Board meeting as Chair of the Foundation. … Mr. Wright, who was uninvolved in the details of the GFA arrangement, simply was wrong on the facts …. T he fellowship costs charged to the Foundation increased by only $338,036 that year—not $750,000—and of that amount, only $243,020 was attributable to the fact that the excess income from the hard endowments … was now being used to support the GFA fellowships. Most importantly, Mr. Wright obviously did not know at that time that the GFA program was, in fact, fully financed from non-Foundation sources….

Undercharges and Over-credits

[T]hrough … historical undercharges and over-credits … the University has reduced potential charges to the Robertson Foundation by more than $230 million, an amount that exceeds the total amount of the "admitted overcharges" and any other overcharges that Plaintiffs have alleged in this case. In view of these historical undercharges and over-credits, it is clear that the University has been more than equitable in its efforts to carry its share of the total cost of the Woodrow Wilson School.

The Base-Year Credit: [T]he Bowen Formula provided that the Foundation would be charged "only for the expansion in the graduate program which has occurred since the [Robertson] Foundation gift" by subtracting from Foundation charges the cost of operating the School's graduate program at the time of the gift (adjusted for inflation). The University's assumption of these "base year" charges was not, however, required by the Foundation's Certificate of Incorporation, which authorizes Foundation funds to be used "to establish or maintain and support at Princeton University, and as part of the Woodrow Wilson School, a graduate school." In today's dollars, the Bowen Formula's allocation of these base-year costs to the University reduced potential charges to the Robertson Foundation by nearly $210 million (in current dollars) over the past 40 years—more than all of the overcharges alleged by plaintiffs combined.

Indirect Cost Undercharge: Beginning with FY 1993 [through FY 2002], the University applied a simplified "lockstep" method of assessing Robertson Foundation indirect costs…. This "lockstep" method … led to a substantial decrease in the University's indirect cost reimbursement, relative to the amount of direct costs funded by the Foundation…. Defendants' indirect cost expert … estimated how much the University would have recovered in indirect costs during the "lockstep" period had the Foundation's indirect cost rate been calculated according to the earlier methodology…. Based on this analysis, [he] concluded that, "[l]argely as a result of the 'lock-step' indirect cost recovery mechanism that was in place from FY 1993 through FY 2002, Princeton University undercharged the Robertson Foundation by $10,419,456 during this period."

University's "Float:" Because the Foundation is not required to reimburse the University for expenses as they are incurred, the Foundation has the opportunity to earn additional interest and investment returns on its funds. The economic advantage that this provides to the Foundation is substantial…. [F]rom FY 1990 through FY 2004, the Foundation saved $13,776,015 due to the University's practice of advancing the Foundation's share of expenses as they are incurred.

Bendheim Hall: The foundation board approved the contribution of $2 million toward this construction project [Bendheim Hall]. Although this contribution represented less than half of the total construction costs of the new building … Woodrow Wilson School activities occupied nearly 95 percent of the space of Bendheim Hall…. [I]f [the plaintiff's expert's] own space-occupancy analysis … were applied to the Bendheim Hall project, the Foundation could have been charged for an additional $2,866,323.

The University does not seek an affirmative refund of or restitution for these historic undercharges and overcredits, as plaintiffs' inapt arguments regarding waiver and voluntary contribution might suggest. Contrary to plaintiffs' claims, defendants are not attempting to "recover" these undercharges and overcredits through some request for affirmative relief. Rather, Defendants simply suggest that they should be factored into the mix of evidence that will inform the Chancery Court's assessment of the overall equities in this case.

In Opposition to Plaintiffs' "Fiduciary Duties" Motion

Plaintiffs' brief offers a distorted and undocumented version of the facts, based on mischaracterizations of the record, that has nothing to do with the essentially declaratory "relief" that they seek in their motion…. Plaintiffs posit a disputed and extraordinarily narrow definition of the Robertson Foundation's "mission," but do not attempt to reconcile that definition with the words of the Foundation's Certificate of Incorporation or the actions of the Foundation's Trustees (including its first President, Charles Robertson) in interpreting and implementing it. They claim that the graduate program of the Woodrow Wilson School "is doing a terrible job," yet tie that bald assessment to no evaluation whatsoever of the quality of the School's students, faculty, curriculum, administration, programs and activities. In fact, plaintiffs' sole academic expert admitted that his opinion was based upon his misquoted and mistaken reading of the Certificate of Incorporation, on a point he admitted was important to a correct understanding of the Foundation's mission.

[P]laintiffs offer no explanation as to why plaintiffs William Robertson and Robert Halligan, during their tenures on the Board of the Robertson Foundation (from 1975 and 1982, respectively), failed to move the Board at any of the meetings that one or both of them attended to inquire into or seek to change Foundation governance practices including its annual review of Foundation contributions to the Woodrow Wilson School via application of the Bowen Formula.

Lacking evidentiary facts to support their claims, plaintiffs have resorted to baseless, ad hominem attacks upon the University-designated Trustees. But as the evidence will show, President Shirley Tilghman has not, as plaintiffs claim, "admitted deliberately hiding information about blatantly improper expenditures from the Family Trustees." She and Messrs. Oxman, Sherrerd and Wendell have not "deliberately lied to the Family Trustees." And these four University-designated Trustees certainly have not failed "to advance the Foundation's mission and protect its assets." To the contrary, under President Tilghman's leadership, the University hired a dynamic new Dean of the Woodrow Wilson School, Anne-Marie Slaughter, who has launched a number of significant mission-enhancing initiatives. And the University-designated Trustees, again led by President Tilghman, have introduced a number of governance and spending initiatives on behalf of the Robertson Foundation -- despite the efforts by plaintiffs Robertson and Halligan to block every initiative….

Plaintiffs' mammoth "statement of facts" gratuitously injects pages upon pages of factual discussion that is both disputed and, as plaintiffs boldly proclaim, "not strictly essential" to the questions presented by their motion. It is apparent that plaintiffs were more interested in making an inaccurate court filing that their public relations people could peddle to the press than they were in focusing the issues for the Court.

For more than forty years, the Robertson Foundation Board of Trustees (over which Charles Robertson presided for the first two decades) operated by consensus in overseeing Foundation support for the graduate program of the Woodrow Wilson School. That support was entirely consistent with the mission of the Foundation. Only in 2002, as a prelude to the litigation, did the Board experience a divided vote on any issue. Notwithstanding the ensuing litigation, defendants Shirley Tilghman, Stephen Oxman, John J.F. Sherrerd and Peter Wendell -- the current University-designated Trustees -- have done their utmost to fulfill their fiduciary duties to the Foundation, advance its mission and protect its assets.

Plaintiffs have consistently attempted to characterize this case as one involving "donor intent" with respect to a "restricted gift" in the nature of a charitable trust. But the only "restriction" imposed by Marie Robertson upon her gift of A&P stock to the Foundation was that the Trustees of the Foundation agree to use its assets in accordance with the Foundation's Certificate of Incorporation and Bylaws…. One provision of the Certificate of Incorporation about which there is no ambiguity is Paragraph 3, which authorizes the Foundation: "… to contribute, lend, pay over, or assign the income of the corporation and/or the funds or property of the corporation … to or for the use of Princeton University: (a) to establish or maintain and support at Princeton University, and as a part of the Woodrow Wilson School, a Graduate School …; (b) to establish or maintain scholarships or fellowships, which will provide full, or partial support to students admitted to such Graduate School …; (c) to provide collateral and auxiliary services, plans and programs …."

It appears that, on plaintiffs' reading, the Certificate of Incorporation authorizes Foundation funds to be used only for instructional activities directly related to "training" graduate students for government service in the narrow field of international affairs. Plaintiffs' extraordinarily cramped definition of the Foundation as a vocational school is at odds with the language of the Certificate of Incorporation and contrary to decades of practice…. By focusing on the graduate program within the existing Woodrow Wilson School of Public and International Affairs -- itself an integral part of an integrated research University -- the Certificate of Incorporation recognized that the Foundation's goals could not be realized in a vacuum. Rather, they could best be effectuated through the support of a world-renowned public policy program that would enroll students dedicated to public service and provide them with the knowledge and skills that would qualify them for careers in government service. Thus, the Certificate of Incorporation, by its terms, authorized Foundation support for the entire graduate program at the Woodrow Wilson School—including "scholarship and fellowships" and "collateral and auxiliary services, plans and programs"—rather than just for some subset of activities directly relating to vocational training for prospective United States Foreign Service officers.

[The catalogue] for the very first year of operations of the expanded graduate program [1962], retrieved from Mr. [Charles] Robertson's files, reports that … [T]his program … includes both international and domestic affairs—indeed, the distinction here is increasingly hard to draw for there are few 'domestic' activities without international implications, and events abroad quickly make themselves felt internally. Princeton's conception of 'public affairs' is broad. Anyone whose decisions and actions normally have important consequences for the public welfare is regarded as engaged in public affairs, whether he is employed in the executive or legislative branches of government, and whether his position is appointive or elective, civilian or military, or located in international, national, state, or local fields of action. Clearly a definition of public affairs framed in these terms also embraces some non-government activities, for example, certain types of work in journalism, in private foundations, and in business, labor and consumer organizations.

In January 1977, Charles Robertson wrote …: The Woodrow Wilson School is first rate. Don Stokes … is presently the dean of the Woodrow Wilson School and is doing an outstanding job… I know you will agree with me once you have had an opportunity to look closely at the School, its Dean, faculty, student body and curriculum.

[I]n his January 22, 1981 report to the Robertson Family, Mr. [William] Robertson wrote: "The Woodrow Wilson School is the leading educational institution in the world in the field of public and international affairs as a result of (a) its fine faculty and student body and the administration by Princeton University and (b) the great financial capability it possesses as a result of the Robertson Foundation gift by Marie and Charles Robertson." … In his April 12, 1991 report to the Robertson Family, Mr. Robertson wrote that "[r]elations at … the Robertson Foundation [and another institution supported by the Family] … are excellent. And I have to say, both institutions are achieving the kinds of goals that Mom and Dad would have hoped for. The Woodrow Wilson School continues to be the foremost school in public and international affairs in the world …"

Plaintiffs William Robertson and Robert Halligan, who have served on the Board since 1975 and 1982, respectively, participated in that very enterprise and at no point raised any objection to it … Indeed, at no point did either individual ever object to any of the financial statements or Dean's reports presented in the course of the Foundation's annual meetings, or to any of the Foundation funding that they now attack in this litigation; nor did either individual even apparently inquire about the Bowen formula once it was initially adopted, the settlement process or the settlement results. In contrast to their decades of seeming approval of the "informal collegial enterprise," plaintiffs William Robertson, Robert Halligan and Katherine Ernst … since the filing of this lawsuit have voted in virtual lockstep against the vast majority of proposed expenditures or governance motions offered by the University-designated Trustees—and even against the adoption of the minutes prepared by the Foundation's Secretary.

[W]ith respect to advancing the mission of the Foundation, it should be noted that President Tilghman -- in search of dynamic leadership for the Woodrow Wilson School consistent with the mission of the Robertson Foundation -- selected Anne-Marie Slaughter as Dean of the School before this litigation was initiated by plaintiffs. Notwithstanding the litigation -- indeed, in spite of the litigation and plaintiffs' public efforts to denigrate the Woodrow Wilson School and Princeton University -- Dean Slaughter's record of accomplishments to date is nothing short of spectacular. The University-designated Trustees have thoughtfully and consistently supported Dean Slaughter in her advancement of the mission of both the Foundation and the Woodrow Wilson School…. [W]ith respect to protecting the assets of the Foundation, it should be noted that, under Mr. Sherrerd's inspired leadership as the founding Chair of the Robertson Foundation Investment Committee, the assets of the Foundation have grown from less than $40 million in 1978 to more than $650 million today, while supporting increased contributions by the Foundation to the Woodrow Wilson School graduate program. Moreover, the decision by the University-designated Trustees to retain PRINCO to manage the assets of the Foundation -- with a resulting increase in the market value of the Foundation assets of more than $134 million in just 24 months -- represents yet another conscientious decision those Trustees made in the face of implacable and unreasonable opposition and litigation.

[T]he specious claim that the University-designated Trustees "ignore . . . the very existence of the Foundation as a corporate entity with its own rights" is belied by the initiatives undertaken to enhance the operations, accountability and transparency of the Foundation by those Trustees under the leadership of President Tilghman since she assumed the Presidency of the Foundation in July 2001. Those initiatives [include]:

Detailed reporting and formalized advance approval of capital construction projects. At President Tilghman's very first Board meeting as a Foundation Trustee, in April 2002, she supported, and the Board passed, a resolution requiring advance approval by the Foundation Board for all future capital construction expenditures. Since that time, every capital expenditure funded by the Foundation has been preceded by extensive project disclosure and approved by a formal Board vote.

Improved financial reporting and presentation of advance budgets. Under President Tilghman's leadership, the Foundation Board has been presented with advance budgets showing prospective Foundation expenses in detail.

Replacement of the Bowen Formula and modernization of the funding allocation process. In addition to ensuring that the Board is provided with detailed budget information in advance of actual charges, President Tilghman and the other University-designated Trustees have been instrumental in reexamining and modernizing the system that has allocated Woodrow Wilson School costs between the University and the Foundation for the past four decades…. At a December 15, 2005 special meeting … the Robertson Foundation Board (by a four to three vote, with the Family-designated Trustees opposing) adopted a comprehensive new mechanism for allocating Woodrow Wilson School costs between the University and the Foundation. By the same margin, the Board adopted a strategy statement entitled "Implementing the Mission of the Robertson Foundation," that had been promulgated by Dean Slaughter and ratified by the faculty of the School. The Board also voted unanimously to create a Budget Committee, and (by a vote of four to three), to appoint Mr. Oxman, Mr. Halligan and Mr. Wendell to that Committee.

The Foundation's retention of an independent Secretary-Treasurer. [T]he Foundation, under President Tilghman's leadership, has engaged an independent Secretary-Treasurer for the Foundation who now exercises the responsibility to authorize the transfer of Foundation funds.

Review and correction of prior-year charges. Under President Tilghman's stewardship, the University has reviewed prior year charges to the Robertson Foundation and, where it was determined that charges were improperly or inadvertently calculated, credited the appropriate amount back to the Foundation.

Negotiation and Adoption of an Investment Management Agreement and a Treasury Services Agreement with Princeton University. Mr. Oxman on behalf of the Foundation negotiated, with the assistance of outside counsel … an Investment Management Agreement ("IMA") between the Foundation and the University to govern supervision of investment of the Foundation's assets by PRINCO. The IMA was approved by the Foundation Board (by a vote of four to three) on December 17, 2003.

[P]laintiff William Robertson has (i) publicly attacked and falsely accused Princeton University and its leaders on numerous occasions, (ii) publicly declared that he will never support or work with the University, (iii) dismissed as a "publicity stunt" Dean Slaughter's most recent and mission-advancing initiative of creating a new scholarship program to encourage students to enter government service, and (iv) raided the private foundation controlled by him and his siblings to fund his salary and this litigation, and to mount a public relations campaign designed to discredit the University and the graduate program of the Woodrow Wilson School. By his actions and words, Mr. Robertson has demonstrated that he is no longer qualified to serve as a Trustee of the Robertson Foundation -- an issue that the Delaware Court of Chancery may have to address in the future.

At the very outset of their brief, plaintiffs assert that "the graduate program of the Woodrow Wilson School is doing a terrible job—and, in fact, is not even truly trying to do a good job—of recruiting, preparing and placing professional career government employees, particularly for the federal government in the area of international relations." This assertion has nothing to do with plaintiffs' motion for partial summary judgment, and everything to do with their efforts to discredit the very graduate program which plaintiffs have a fiduciary duty to support. As demonstrated by the accompanying Certification of Dean Slaughter, moreover, plaintiffs' assertion is dead wrong. In the words of Professor Joseph S. Nye, Jr., former Dean of the Kennedy School of Government at Harvard University, U.S. Assistant Secretary of Defense for International Security Affairs and Chairman of the National Intelligence Council … 1. The Woodrow Wilson School's efforts and success at recruiting students with a commitment to public service did not lag behind its peer institutions. Indeed, under the leadership of Dean Anne-Marie Slaughter, the School has renewed and reinforced that commitment to public service in a myriad of ways. 2. The faculty of the Woodrow Wilson School is first rate, and the curriculum is well designed to prepare graduate students for future leadership positions in public service in general and in the federal government (especially in international affairs) in particular. 3. The first jobs taken by graduates in only one of a number of criteria to consider in evaluating the "success" of the Woodrow Wilson School graduate program, and the product of a number of factors which are beyond the control of any one educational institution. Even judged by this single criterion, the Woodrow Wilson School does as well as (or better than) its peers, and has even improved upon this record under Dean Slaughter's leadership. 4. The use of joint appointments has enabled the Woodrow Wilson School to attract a world class faculty committed to public policy and the mission of the School, which in turn attracts first rate students. The Robertson Foundation's support of research and research centers is critical to the recruitment and retention of that would class faculty; and their research enriches good teaching. Moreover, the School's research centers promote interdisciplinary research, provide opportunities for student involvement (as well as certificate programs), and create communities of faculty, visiting fellows (often practitioners) and students focused around important policy issues. 5. The Woodrow Wilson School is one of the most respected schools of public and international affairs in the world. As demonstrated by the words and actions of Princeton University President Shirley Tilghman and Woodrow Wilson School Dean Anne-Marie Slaughter, the University and School are fully committed to the mission of the Robertson Foundation and more than capable of fulfilling it.

Dean Slaughter's Certification

[The Woodrow Wilson School] is an energetic place, attracting superb students and recruiting top faculty members from all disciplines. Our alumni are extraordinary, and extraordinarily grateful to the School and to the Robertson Foundation for making their education possible.

The Woodrow Wilson School has a critical role to play in attracting, educating and training the very best students and preparing them for careers at the highest levels of government service, consistent with the traditions and mores of Princeton University as a whole. The School is able to provide our graduates with the skills and tools needed to serve the country and the world; moreover, the School's intellectual assets, research, and graduate program can support the U.S. government and international organizations in their goals to provide public servants with the best professional education possible, and to respond to policy problems here in the U.S. and abroad.

Over the last 40 years, world and national events have provided both the opportunity and responsibility to change and grow in directions that could not have been predicted by Charles and Marie Robertson or Presidents Goheen and Bowen. The School now has faculty members jointly appointed with eleven different disciplines, including psychology, geosciences, ecology and evolutionary biology, molecular biology, computer science, and astrophysics, as well as the more traditional disciplines of political science, economics, history, sociology, and demography. The School's faculty is stronger and more multi-disciplinary than it has ever been. This growth reflects not only the evolution of government needs (the State Department is now actively recruiting experts in science and technology), but also the School's efforts to better prepare its graduates in fields such as public management (the psychologists teach a core course in psychology and public policy designed to prepare our students to be effective managers). Further, the increasing specialization of all the disciplines, and indeed the sub-disciplines, has led to the creation of research centers and specialized certificates in areas ranging from health policy to science and global security.

In recognition of the many paths to leadership positions in the government and the many private and non-profit organizations that now contract with government agencies and departments to perform functions that were once performed directly by government officials, the School looks for students with experience and interest in serving the public in a variety of ways: through work in all forms of government, with international organizations, with non-governmental organizations, and as producers of research that informs public policy. Indeed, based on the ways in which government itself now does its work, by outsourcing a wide array of functions and increasingly through public-private partnerships, it is valuable if not essential for our students to understand the culture and the incentive structure of the non-profit and private sectors as well as the public sector. Having classmates who have already had experience in all three sectors enhances their education and contributes to the Foundation's mission. After graduation, many if not most of our alumni can expect to move back and forth between the government and the non-profit sectors; some number are also likely to spend some time in the private sector working on policy issues like environmental protection, trade or global health issues, as well as in public-sector consulting firms.

The curriculum of the School is carefully structured and comprehensive from both the theoretical and practitioner standpoints. Reflecting the traditions of the larger university of which the School is an integral part, the curriculum takes a long-term approach, emphasizing fundamental analytic methods and intellectual breadth rather than narrowly targeted vocational skills. By doing so, the School prepares students to deal not only with the immediate policy challenges confronting the government when they graduate and enter public service, but also with the very different, and often unanticipated, challenges that will await them in future decades when they may assume leadership roles within the government.

Once here, WWS graduate students have the opportunity, unique to any school of public policy and international affairs, to participate in a required Graduate Policy Workshop that takes on a real-life client and provides pertinent policy recommendations based on in-depth classroom and field research. Additional opportunities for students interested in international affairs to engage directly with issues of current importance and the people setting the policy agenda can be found through initiatives such as the Princeton Colloquium on Public and International Affairs, the Princeton Project on National Security Strategy, and a recently established partnership with the Brookings Institution.

The School's graduates must be thus comfortable with a range of issues of both international and domestic policy. Indeed, the State Department itself requires that prospective foreign service officers have knowledge of, among other areas, "the U.S. political process and its impact on policy" and "U.S. economic systems." Indeed, of the graduate courses that focus on domestic policy, several -- such as the basic domestic politics course, the advanced domestic microeconomics course, and a course on the federal budget -- specifically satisfy State Department requirements.

The ability of the government of the United States to defend and extend freedom throughout the world depends on effective leadership not only within the government, but in the many organizations that collaborate with the government in carrying out its objectives…. [G]overnment itself is changing the ways it does business, in some cases to take advantage of the presumed greater efficiencies of the private sector, in others to respond to political and budgetary realities, and in still others to harness both the energy and resources of the non-profit and private sectors to help "make government work."

One purpose of the Robertson Foundation is "[t]o provide collateral and auxiliary services, plans and programs in furtherance" of the mission…. Accordingly, and as outlined in the Implementing Statement, the Foundation should support ongoing funding of non-classroom learning such as lectures, conferences and internships; career service programming; faculty research; and outreach and communication activities.

Faculty members who are conducting research and teaching in a particular sub-discipline -- such as health policy, American politics or international political economy -- seek colleagues as discussion partners, co-authors, visiting lecturers and conference participants. Hiring additional full faculty members in these areas is generally not cost-effective. Bringing in outside fellows to be in residence at Princeton for one year, on the other hand, creates such a community at relatively low cost and allows School faculty members to circulate their ideas more widely and benefit from ideas developed in other places. Centers have, therefore, become key means of both recruiting and retaining our most valued faculty members, who are in turn critical not only for teaching but also for attracting the very best students.

[A] well-functioning center creates an intellectual community for students as well as faculty members, and ultimately supports special courses, curricular innovations and programming for students interested in these various areas of specialization. CHW [the Center for Health and Wellbeing] began by bringing in visiting faculty and researchers and by running a well-regarded seminar series and periodic conferences. It now offers a special M.P.A. certificate in health and health policy that attracts a growing number of top M.P.A. students to the School.

The Robertson Foundation is funding only a fraction of the total funding that School-affiliated centers, programs and projects receive. Historically, the bulk of funding for centers and programs comes from outside foundation grants and government contracts, as well as University funds. Indeed, in 2004, Foundation funding accounted for less than 20% of all funding received by School centers and programs. In addition, in some cases, the School's graduate program benefits enormously from research centers, programs and projects that the Foundation does not fund in any significant way. The primary example is the Princeton Institute for International and Regional Studies ("PIIRS"), a joint venture between the University and the School that provides support for our revitalized international relations faculty. Many of our Field I (international relations) students also participate in the projects and conferences of the Lichtenstein Institute for Self-Determination. The Princeton Project on National Security offers another example. Over $500,000 has been raised to date from outside sources, with the Robertson Foundation contributing only $30,000.

[B]etween 1973 and 2005, the majority of M.P.A. graduates from the Woodrow Wilson School who took jobs (66.7%) chose employment in the public sector upon graduation. 41.2% of M.P.A. graduates from the WWS between 1973 and 2005 went to work in government service (with 24.9% going to the federal government, 5.2% going to state government, 5.2% going to local government, and 6.0% working for foreign governments). 27.1% of WWS graduates who took jobs during this period went to work for nonprofit and international organizations, which are organizations to which the federal government delegates many of its activities. 3.61% of WWS graduates who took first jobs during this period went to work in academia. As a result, 66.7% of WWS graduates who took jobs went to work in the public sector -- a much different landscape than the one painted by plaintiffs.

In 2004, I urged the prestigious Presidential Management Fellows program, a primary gateway for graduating MPA students to take jobs in the federal government, to remove an applications cap that previously allowed only ten percent of the graduating class to apply for the program. When the cap was lifted, more than half of the eligible students in the MPA graduating class applied for the program, which provides two-year internships in the federal government . Despite intense national competition, more than half of our applicants ( 16 out of 30) were selected. In 2004, when the cap was still in place, eight WWS students were selected into the program ….

We are using the 75th Anniversary to launch a series of new initiatives: increasing the ties between the graduate and undergraduate programs; instituting new joint-degree programs that will allow us to attract the highest quality students in various disciplines and teach them the skills necessary to apply those skills in government jobs; and most important, launching the Scholars in the Nation's Service Initiative to increase the number of students taking first jobs in federal government service. That initiative was announced during an all-day conference that brought together practitioners, academics, and policy makers to examine the challenges in attracting the best and brightest to government and the concept of government service as the highest form of public service to the nation.